Interchange Fees Should Have Gone the Way of the IBM Selectric Typewriters

January 27, 2008

[originally posted Oct 18, 2007]

Unlike the fee structure of interchange rates, it is transparent that the named defendants along with their legal and advocacy teams are regularly reading WayTooHigh.com, yet, they remain nearly silent on many issues.

So, let us step back and remember the history of technology. Whatever happened to the millions of manual typewriters? How about the IBM Selectric typewriters – which were the staple for most offices just decades ago? The same question can be directed towards the manual credit card imprinters and multi-paged carbon copy paper payment receipts?  Our company, ScanMyPhotos.com, still has a manual imprinter that we use to demonstrate how unfair these fees are.  See this article with photo.

Both typewriters and manual credit card imprinters are nearly obsolete.

Today, you can buy a keypad for your computer for a couple of dollars on EBay, but only the Smithsonian in Washington is interested in those antiquated manual credit card imprinters. They all served a purpose, back when interchange fees were cost-based, but, one part is still around. The merchant payment system is still with us, and now amounts to a nearly $40 billion annual hidden tax that few retailers or consumers even understand.

Today, as the banks continue reporting dismal profits, due to the housing sub prime mortgage fiasco and other egregious mismanagement, the interchange boondoggle continues to fill an otherwise failing levee of corporate wretchedness. If it was not for the political and massive financial might of the banking industry (its member banks jointly owned Visa® and MasterCard®), these fees would have nearly disappeared.

Just as how the health care industry got a kick in the head after Michael Moore’s film “Sicko,” perhaps that is what Visa and MasterCard needs too.

Today, due to extraordinary political and economic schemes and collusion, the interchange rates in the U.S. are more than double, and often even more than that of collections in other, economically and technologically less developed nations.

Today, their market power is desperately grasping to hold on to these fees, especially when their other sources of revenues are being threatened.

Today, just as the Selectric typewriter and other ancient-like products abdicated to new technologies and innovations, we still have confidence that businesses and consumers will soon wake up and recognize that the banks’ electronic payment system are also relics; built on what we assert are illegal, price-fixing schemes to fill their vaults with billions of dollars that are being misdirected due to their absolute market power and price-fixing by agreement.

Whether it is forcing credit card paying motorists to toss over upwards of nearly two-percent of the total cost of a fill-up, to demanding that an inner-city mom, shopping at her local convenience store for a gallon of milk is helping to subsidize the premium affinity cardholders’ free mileage trip to the tropics, this must come to an end.

During the previous nearly [940] postings by WayTooHigh.com over the past nearly three years, we have provided news, commentary and updates on what we assert is an extraordinary conspiracy by the Visa and MasterCard associations to wield their market power to fix the price of credit card interchange fees.

Visa is wrong.MasterCard is wrong.

And, their member banks are wrong.

To quote from the movie “Network,” the payments network has enraged merchants, who, like us are mad a hell and are not going to take it any more

  

 Want to know more about lead plaintiff ScanMyPhotos.com?  Click here and read their daily blog: Tales from the World of Photo Scanning